Why it’s all about the cloud for the UK’s most active corporate VC

Salesforce Ventures is the most active corporate VC in the UK, but its focus is only on cloud start-ups. Here's why.

When Salesforce Ventures launched in 2009 as part of the enterprise giant, Salesforce, the UK’s start-up ecosystem was just gaining ground. Since then, the corporate VC’s portfolio has grown to include the likes of Survey Monkey, DropBox, as well as British businesses like Onfido, and Qubit.

In what IDC calls “The Salesforce Economy”, cloud computing start-ups, consultants, and other ancillary products and services will drive more than $35.8 billion to the UK GDP, while creating 149,000 new jobs from the end to 2015 to end of 2020. Recently, Salesforce Ventures announced a $50 million fund to invest specifically in cloud consulting start-ups. With cloud related enterprise spending set to almost double to $162 billion in the next few years, now is a pivotal time for attracting investment, says Alex Kayyal, head of EMEA.

“We started investing in 2009, and since then, ventures’ goal has been to discover and develop the latest cloud innovation. We want to help companies succeed, and we want to support innovation happening in Europe. Globally, we’re the third most active corporate VC. In the UK, we’re the most,” he says. “We always think about how we can add value to companies. We like to to co-invest alongside other VCs to add value specific to Salesforce.”

On average, corporates are spending more on collaborations with UK SMEs than R&D, according to economic data from Bond Dickinson. The research shows that investment is known to have exceeded £102 billion in 5,447 mergers and acquisitions, joint ventures and minority stakes between a domestic or international corporate and a UK SME between 2013/14 and 2016/17.
This exceeds the £62 billion large organisations invested in UK research and development between 2013 and 2016, and represents more than a seventh of the £683 billion total UK business investment.

For Salesforce Ventures, its laser focus on cloud start-ups ties back to the fact that Salesforce was a pioneer in the shift to the cloud. “We believe the best entrepreneurs and best companies always have a choice when raising investment. When they come to us, they choose us for three main reasons. Firstly, it’s access to our ecosystem and executives, partners and product team, which is important for companies in the enterprise space. Secondly, we pioneered the shift to cloud so we have the resources to help cloud start-ups. We also lend the Salesforce credibility, and as an early stage company, it’s really important to get the brand out there to attract great customers and have great people on the team. Having the Salesforce brand behind you can really help.”

Salesforce itself an example of the kind of high growth businesses it plans to attract. Founded in 1999, the company floated on the New York Stock Exchange five years later and is the fastest growing company to reach its current scale as a global software giant.

“The best entrepreneurs know its not just about raising money from us, it’s everything else that comes with having a VC on board. We don’t want to be the only VCs around the table. We look at start-ups that have already got the top tier VCs on board. Building a big business is a partnership, and our goal is to accelerate those partners growing alongside us and provide them with the resources they need,” Kayyal adds.
“We’re super proud of being the most active corporate VC in the UK. Whether it’s vertical stacks, or machine learning, the UK has been an incredible beacon for that kind of innovation, and we want to be a big part of that. We’ll continue to support entrepreneurs towards that journey so that more and more B2B founders can grow successfully.”

Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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